Article Text
Bank Failure. BUFFALO, April 9.-E. S. Rich's Bank of Exchange closed its doors this morning. It is thought everything will be paid. The cause of suspension is from embarrassment of the New York branch house.
14978. E. S. Rich's Bank of Exchange (Buffalo, NY)
Bank Information
- Episode Type
- Suspension → Closure
- Bank Type
- private
- Start Date
- April 9, 1866
- Location
- Buffalo, New York (42.886, -78.878)
Metadata
- Model
- gpt-5-mini
- Short Digest
21a0a774
Response Measures
None
Description
Multiple contemporaneous newspapers report the bank 'closed its doors' / 'suspended' on April 9, 1866 because of embarrassments tied to a New York house and bad investments in manufacturing. Later banking-department reports (Dec 1866) state the bank became insolvent and 'passed into the hands of assignees' — indicating permanent closure/insolvency (receivership/assignees). No article describes a depositor run prior to suspension.
Events (3)
1.
April 9, 1866
Suspension
- Cause
- Bank Specific Adverse Info
- Cause Details
- Closed/suspended due to embarrassments tied to a New York house and large unproductive investments in manufacturing enterprises that failed to prove remunerative.
- Newspaper Excerpt
- E. S. Rich's Bank of Exchange closed its doors this forenoon. It is thought everything will be paid. The cause of suspension is stated to be from embarrassment of the New-York house.
- Source
- newspapers
2.
December 29, 1866
Other
- Newspaper Excerpt
- Two banks, the E. S. Rich's Bank of Exchange, an individual bank located at Buffalo, ... have become insolvent during the year, the former passing into the hands of assignees.
- Source
- newspapers
3.
December 29, 1866
Receivership
- Newspaper Excerpt
- the E S. Rich's Bank of Exchange ... have become insolvent during the year, the former passing into the hands of Assignees ... The securities of each will be ample for the redemption of their notes at par.
- Source
- newspapers
Newspaper Articles (9)
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the United States government to lease Burton's theatre for United States court rooms and offices, and that, therefore, they were illegal and void. Case still on. The case of Carl Noelte, who is charged with having defrauded Meyer & Co., bankers of Berlin, Prussia, by several thousand thalers, was again adjourned to another day, in consequence of business engagements by Commissioner Newton. Noelte still remains in the custody of the Sheriff of New York, who detains him at the suit of plaintaiffs in civil actions, and declines on that ground to surrender him to the United States authorities, before whom motions have been repeatedly made by counsel representing the Prussian government to return Noelte to Prussia for trial. An argument took place before Judge Clerke at the Supreme Court, Chambers, yesterday, between the Hudson River Railroad Company and their former attorney, Mr. Thomas M. North. The latter was removed from office, and, it is alleged, took away the legal papers of the corporation, refusing to give them up until his costs should be paid. The Indian Agency libel suit was concluded yesterday, when Judge Mason charged the jury on the law and facts in the case. Under direction of the Court the jury will bring in a sealed verdict this morning. In the case of the death of Caroline Schotz and John and William Rohde, the children who were supposed to have been poisoned or smothered by their mother in a shanty in Forty-seventh street, an inquest was held last evening at the Twenty-second precinct police station, at which the testimony of several witnesses was taken and opinions of the doctors who conducted the post mortem examination, and of Dr. Doremus, who made a chemical examination of the intestines of the children were given. On the evidence the jury brought in a verdict to the effect that they believed there was cause to suppose that the deceased came to their death by suffocation at the hands of their mother, Ernestina Schotz. She was accordingly held to await the action of the Grand Jury. About nine o'clock last night a fire occurred at 883 Second avenue, corner of Forty-seventh street, in a bakery belonging to F. H. Tiel. Loss about $1,500; insured for $1,000. An adjoining building, occupied as a crockery store, was damaged to the extent of $800; insured for $1,000. Two tenement houses in East Fortyseventh street were considerably damaged; partially insured. The steamship Atlantic, from Bremen and Southampton, with 900 passengers, the steamship Hansa, from the same ports, with 691, and the ship North American, from Liverpool, with 371, arrived at this port yesterday, making an aggregate of 1,962 passengers from Europe in one day. The England is in quarantine at Halifax with 1,202 more. The Shipping Intelligence and Shipping Advertisements will be found in the Supplement sheet. The Marriages and Deaths are also published in the Supplement sheet this morning. The stock market opened steady, became weak, and closed firm yesterday. Gold was heavy and closed at 126 1/4 23.1. The Money Article will be found in the Supplement sheet. The decline in gold yesterday again upset all calcula. tions about commercial values, and prices were all "at sea" once more. The actual changes noted were not radical, but the markets were very sensitive. Petroleum was dull and drooping, and almost entirely nominal. Cotton was inactive and nominal. Sugar quiet. Coffee heavy. On 'Change flour was dull and lower. Wheat was dull and heavy. Corn heavy. Oats lower. Pork irregular. Beef steady. Lard heavy, and whiskey dull and nominal. MISCELLANEOUS. The Senate of the Fenian Brotherhood met in this city yesterday in secret session. President Roberts' message was made public. Two hundred Fenians are reported to have left Portland for Eastport, Me., yesterday afternoon. A schooner was chartered to carry the arms. The excitement over the confederation resolutions still continues in New Brunswick. The anti-confederation minority of the upper house have sent in a protest against the address to the Queen favoring confederation. The government members were in consultation all day yesterday, and it is supposed will resign. Rumor at Fortress Monroe whispers that Jeff. Davis is to be removed to Richmond on a writ of habeas corpus. Fears are entertained that he cannot live through the coming summer if not released, as his health is growing worse. E. S. Rich's Bank of Exchange at Buffalo suspended yesterday. it is supposed on account of embarrassment from the New York house. It is thought everything will be paid. The Boston and Cuba Steamship Company's steamer Tonawanda, Captain Berry, on her way to Havana, on the 28th ult., went ashore on the Florida coast in a squall. The passengers, crew and most of the cargo between decks were saved. The election in Hartford, Conu., yesterday, resulted in the triumph of the entire democratic ticket. This changes the entire political character of the city government. A fire at Edinburg, Indiana, on Friday, destroyed the Johnson House, Dombert & Co.'s woollen factory and Rickett and Co 's distillery. Loss sixty thousand dollars; partially insured. On Saturday night the steam saw mill at Dutch Point, Conn., owned by Henry C. Burgess, was entirely destroyed by fire. Loss $12,000; insurance $2,500 in the Phoenix office.
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Suspension of E. s. Rich's Bank of Exchange mc Buffalo. BUFFALO, April 9, 1866. E. 8. Rich's Bank of Exchange closed its doors this forenoon. It is thought everything will be paid. The cause of suspension is stated to be from emberrassment of the New York honce
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Suspension of E. S. Rich's Bank at Buffale. BUFFALO, N. Y., Monday, April 9, 1866. E. S. Rich's Bank of Exchange closed its doors this forenoon. It is thought everything will be paid. The cause of suspension is stated to be from embarrassment of the New-York house.
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The local money market is quiet. There is only a moderate discount demand, and with the gradual improvement in trade balances are working up and the market is steadily approaching an easier condition.Eastern Exchange remains very close, and no improvement is likely before the compiete opening of navigation. Rates are firm at par buying and 1-10 premium selling. The Buffalo papers give the particulars of the suspension of E. S. Rich's Bank of Exchange, of that city. The liabilities are understood not to exceed $100,000, and the assets, it is stated, will be fully adequate to meet all claims against the bank. The notes of the bank are secured, and will be redeemed either in Buffalo or Albany. The suspension, says the Courier, is in consequence of embarrassments occasioned by large investments in manufacturing enterprizes which have failed to prove remunerative. Some of the banks that were injured by the failure of Culver & Co. have resumed business again. The President of the First National Bank of Titusville announces that the losses have been made good by the stockholders, and the bank was opened on Monday for business. The wholesale trade of the city is gradually improving, though no general activity can yet be recorded. Flour is quiet, but good grades are firm steady. The market was aull for Wheat to-day, and we could hear of no transactions; but prices remain steady, and the higher grades, which are in very light stock, are firm. Corn is in good demand and le better; the market is lightly supplied. Oats are active and firm. Rye and Barley continue inactive and nominal. There is an improving demand for Groceries, and dealers report a fair trade atsteady prices. Provisions are in moderate trade demand and steady. All articles of Produce are steady at previous prices, and generally in good demand. Highwines quiet and unchanged. Petroleum is steadier, but dull.
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- - The Buffalo l'emmercial of the 10th inst. has the following on the failure of Hich's bank: We yesterday briefly announced the surpension of E. S. Inch's Back of Exchange. located in this city. Uy's statement published in one of the morning papere. and made from facts furnished by Mr. Rich himself, it appears thst be was compelled to an'pend payment in consequence of emoarrassmente occuriored by large investments in manufacturing enterpries-which have failed to prore remucerative. The assets of the bank are fulls adequate to meet the liabilities, and all the depositore will be paid as soon as the formality of appointing a receiver can be gone through with and the necessary conversion of property made. The notes of the bank are ecured, and will be redeemea either in this city or in Albany. The whole llaHilltire of the bank do not exceed $100,000. The private fortune of Mr. Rach would be ample to pay this amount at or ce, were 11 not that he has met AND heavy Joeses in his business The broker in New York, in consequence of the depreciation of securities upon which advances h.d been made. It is further stated that "Mr. High bas never bein a speculator in HOCKS to any conelderable extent, and his embarrassment and temporary suspension are owing to no recklessne B on own part." The amount of deposits is said to be small, and as 11 1E claimed that Mr. IC'S means are amply sufflclient to meet all his liabilities, there would seem to be DO cause icr excitement or alarm on the part of those interest d. - The Rochester Democrat of the 10th has the following on the recent failures and bank panic in that city: The bank papic of last week has entirely enbended. It has caused IDjury to some banking firms and to individuale, which will take time to repair. Our readers bare read from day 10 day the particulars of the paulo in the local cointons of this paper. The press. while giving such lacts as transpland. did what i could to allay the unfortunate excitement, Such excl ements always do injury to some one-often to hundreds and thousands; and if men would reflect and act according to the diclater of a sober judgment, many financial dieasters wonld never happen. Mears. Ward & Bro being taken entirely by surprise, stood the draft upon their house until Wednesday evening. when they were compelled 10 suspend, and have made an asstepment for the benefit of their creditors. Mr. Karrie. a broker dome business ID this city. was aleo compelled 10 close bis doors for a short time, but has again reemmed buriness, having the confidence of hif customers and the public. The Dext point of attack was upon the bankinghouse of D. W. Powers. Having harning of what might come he as well prepared for any assault depositors might make upon him. The run ceased FOOD after the crowd got a eight of the reserve on his counters. It was said. after the run ceased, that be had a million of legal-tenders on his shelves. There was no run upon the Savings Banks or upon any other" thanking institutions ID the city. They are all believed to be round and ready and able to discharge any demands depositors may see fit 10 make. The depositore of Ward & Brother are making an effort 10 have them resume the particulars of which are given in another part of this paper. From what we learn. there is a very general dispoeition among tocir depositors to have Euch an arrangement perfected.
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THE Buffalo Courier of the 10th inst, thus alludes to the failure of the Bank of Exchange in that city E. S. Rich's Bank of Exchange, in this city, closed its doors at half-past eleven o'clock yesterday forenoon; and the proprietor of this individual bank has been compeled to suspend payment, in consequence of embarrassments occasioned by large in restments in manufacturing enterprises-which have failed to prove renumeratira The notes of the bank are, of course, secured, and will be redeemed either in this city or in Albany. The whole liabilities of the bank do not exceed $100,000.
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BANK REPORT. BANK DEPARTMENT. ALBANY Dec. 29, 1866. To the Honorable, the Legislature of the State of New-York The operations of this Department, and the condi will tion of the Banking System of the State of New-York a be found mainly in Table two (2) and three (3) and by comparison of Table No. 1 of this Report with Statement These page operations of the Report and of this last condition year. may be condensed as follows: $994,351 Circulation issued 17,901,309 00 cauceled Circulati returned 27,009,449.00 Circulat outstand Sept. 30, 1865 10,102,491 00 Circula on outstandis Sept. 1866 16,906,958 00 Decrea in Circulation Stocks Mortgages a 1 Cash Securities depo ed with the Si perintendent to secure 25,796,550 95 CIP dation, Sept. 1865 11,333,541 76 Do. do. Sept. 30, 1866. 14,463,009 19 Decrease of Securities On the 30th September, 1865, 114 Banks reported to this areDepartment; on the 29th September, 1865, but 85 Bank ported. longer reporting) eight have been converted Of these (no and the remainder into National Banks during the year, and close their have taken steps to transfer their assets, business corporate organization, and are no longer doing under the Banking laws of this State. The process of dissolution foreshadowed in the last Report from this Department, has been progressing rapidly during Buggestive as the year. these considerations are, the causes operating to produce them are beyond the power of State legislation to affect or remove, and Congress, which possesses the power, has thus far imperiously refused no to grant even the negative relief applied for, and I have hope of any change of purpose in that quarter. of During the year 39 banks have availed themselves the provisions of the law au thorizing a deposit O1 money six with the SuperIntendent for the redemption, during all years, of their circulating notes, and have withdrawn other securities. Other measures, looking to a retention of securities in lieu of making a cash deposit, will doubtless be urged upon the atten Mon of the Legislature by parties interested in effecting a change. While the present provisions have proved adequate as a protection to the public, and have afforded a simple, cheap and efficac eious means of redeeming the circulation bur of closing banks, and have imposed no considerable obden the banks themselves, there is, perhaps, no jection upon to a change in the law that shall still afford unquestioned security to the bill-holders, more weighty, than that it will tend to keep in existence this Department beyond a period when it might otherwise be dispensed with. Two banks, the E. S. Rich's Bank of Exchange, an individual bank located at Bu iffalo,and the Ilion Bank, bank ing association located at Ilion, have become insolvent during the year, the former passing into the hands of as signees. and the latter into the hands of a receiver. The of securities of each will be ample for the redemption their notes at par. Though occurring since the close of the fiscal year, it 18 proper to note the fact of the organization under the Banking Laws of this State of a new bank in the City of New-York with a capital of $500,000, and called the NewYork Gold Exchange Bank. It is a gratifying testimony to the simplicity and efficiency of our system of free banking that with all the diser iminations against State it Banks by the General Government bankers still'turn to as the model system of the country, and capitalista organize under it wherever the course of business is such as will enable them to dispense with the issue of circulation as a source of profit. THE SAFETY FUND. Pursuant to the provisions of an act of the last Legislature, chapter554, the Superintendent has converted the available assets of the safety fund into cash, and declared a dividend of 40 cents on eachedollar of the outstanding circulation of the Lewis County Bank, Yates County Bank, Bank of Orleans and Reciprocity Bank. Before arrangements for declaring such dividend were completed, the Receiver of the Yates County Bank commeneed proceedings against the Superintendent, by application for a mandamus to compel the payment to him, for the benefit of creditors of the Yates County Bank, of the whole of the Safety Fund. Believing the assumption of the Receiver to be wholly unfounded in law, and knowing it to be unfounded in justice, and in direct contravention of the order above cited, the undersigned, by cousel, opposed the motion before a special terin of the Supreme Court in Stenben County, and was sustained by the Court on every point. After this authoritative exposition of his duties, the Su perintendent felt that he would be no longer justified in delaying to comply with the plain and mandatory provisions of the above act, a neglect of which would justify, and almost certainly expose him to an action by the parties for whose protection the act was passed, to which action he could interpose no valid defense. The Superintendent, therefore, entered upon the duty imposed upon him, not withstanding the fact of an appeal from the decision of the Special Term. The appeal has been argued before the General Term of the Supreme Court, but no decision has yet been pronounced.* Ideem it improbable that any other conclusion shall be rea ed already pronounced, and that the worst result than that of will be an expenditure for legal services of a portion the fund that might have been applied to a better purpose. But, in event, I am very clear as to the correctness of my official action. The amount of cash held for account of the several funds 18 $69,210 71. BUSINESS OF THE DEPARTMENT. It will be seen that the work of the Department, except the registration of notes, has greatly exceeded that of most previous years. During large portion of the year the labor has been very arduous, taxing the energies of all employed to their fullest extent In view of the demand for promptness in the transaction of the business of the Department, rendering it necessary at all times to have suffic ient force for any emergencies of business, it has been found impossible to reduce the clerical force of the Department, and, as a consequence, the expenses could not be materially lessoned from those of former years. It is, however, anticipated that some reduction of this expense may be practicable during the current year. DESTRUCTION OF BANK NOTE PLATES. Table No. is a list of Bank note plates destroyed during the year. Quite a large number of plates of closed banks now await destruction, which will receive attention at early day. CLERKS IN THE DEPARTMENT in the The name and fixed compensation of the clerks Department will be found in table No. The legislative increase of compensation of the clerks in the several departments has been extended to the clerks in this Department as an act of justice or indeed of ne cessity. Upon none do the inconveniences of depreciated currency and the burdens of taxation and inflated prices fall so henvily as upon those whose support is derived from fixed incomes, as in the form of salary, Most of the clerks of this Department have been employed here for many years, some of them from its orgarrization, and I cheerfully bear testimony to the ability, courtesy and integrity with which the duties of each have been discharged. CONCLUSION. From the statistics herewifh presented, it will be seen that Passing Away' is written upon the Banking system of the State of New York. It is useless to sit in sorrow, or to indulge in vain regrets over the dissolution of a system that has so long mulstered 80 acceptably to the material prosperity of the State. In the march and progress of social revolution, creating new financial exigencies, it has been swept away, leaving to us, however, the hope that the larger growth and higher demands of the opening era may be as fully served and answered as have been those of the one now closing upon our sight. Rospectfully submitted, GEORGE W. SCHUYLER, SuperIntendent *Since the above was written, the General Term has affirmed the decision of the Court below
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NEW YORK BANK DEPARTMENT. Report of Superintendent Schuyler. BANK DEPARTMENT, ALRANY, Dec, 29, 1866. THE To HONORABLE THE LEGISLATURE OF THE STATE OF NEW YORK: The operations of this department and the condition of the banking system of the State of New York will found mainly in tables two and three, and by comparison of table No. 1 of this report with statement in the report of last year. These operations and their condition may be condensed A8 follows: Circulation issued $994,351 17,901,309 Circulation returned and cancelled 27,009,449 Circulation outstanding Sept. 30,1865 10,102,491 Circulation outstanding Sept. 30, 1866 Decrease in circulation. 16,906,958 Stocks, mortgages and cash securities deposited with Superintendent to secure cir25,796,550 culation, Sept. 30, 1865 11,333,541 Do., Sept. 30, 1866 Decrease of securities 14,463,009 STATE BANKS. On the 80th September, 1865, one hundred and fourteen banks reported to this department on the 29th September, 1866, but eighty five banks reported. or these (no longer reporting) eight have been converted into national banks during the year. and the rémainder have taken steps to transfer their assets and close their corporate organization, and are no longer doing business under the Banking laws of this State The process of dissolution foreshadowed in the last report from this department has been progressing rapidly during the year. Suggestive as these considerations are, the causes op rating to produce them are beyond the power of State legislation to effect or remove, and Congress, which possesses the power, has thus far imperiously refused to grant even the negative relief applied for, and I have no hope of any change of purpose in that quarter During the year thirty-nine banks have availed them selves of the provisions of the law authorizing a deposit of money with the Super'intendent for the redemption, during six years. of their circulating notes, and have withdray wn all other securities. Other measures, looking to a retention of securities in lieu of making a cash deposit, will doubtless be urged upon the attention of the Legislature by parties inter ested in effecting a change. While the present provisions have proved adequate as a protection to the public, and have afforded a simple, cheap and efficacious means of redeeming the circulation of closing banks, and have imposed no considera. b'e barden upon the banks themselves, there is, perhaps, no objection to a obange in the law that shall still afford unquestioned security to the bill holders, more weighty than that it will tend to keep in existence this department beyond a period when it might otherwise be dispensed with Two banks, the E S. Rich's Bank of Exchange. an individual bank, located at Buffalo, and the Ilion Bank, a banking association located at Ilion, have become insolvent during the year, the former passing into the hands of Assignees and the latter into the hands of receiver. The securities of each will be ample for the redemption of their notes at par. Though occurring since the close of the fiscal year. 11 is proper to note the fact of the organization under the Banking laws of this State, of a new bank in the city of New York, with a capital of $500.00 and called the New York Gold Exchange Bank. It is a gratify ing test mony to the simplicity and efficiency of our system of free banking that with all the discriminations against State banks by the general go ernment bankers still turn to It as the model system of the country, and capitalists organize under it, wherever the course of busi. ness Is such as will enable them to dispense with the issue of circulation as a source of profit. THE SAFETY FUND. Persuant to the provisions of an act of the last Legislature, chapter554, the Superintender has converted the available assets of the safety fund into cash, and de clared a dividend of forty cents on each doliar of the outstance circulation of the Lewis County Bank Yates County work, Bank of Orleans and Reciprocity Bank Before arrangements for decision such divid- nd were completed the Receiver of the Yates Count Bank commenced proceedings against the Superintendent. C. RD plication for a mandamus to compel the payment to him. for the beneiit of creditors of the Yates County Bank, of the whole of the safety fund. Believing the assumpti of the Receiver to be wholly unfounded in law. and knowing it to be unfounded in justice, and in direct contravention of the act above cited, the undersigned, by counsel. opposed the motion before a special term of the Supreme Court in Steuben county, and was sustained by the Court on every point. After this authoritative exposition of his duties, the Superintendent felt that he would be no longer justified in delaying to comply with the plain and mandatory provisions of the above act, a neglect of which would justily and, almost certainly, expose him to an action by to the partif for whose protection the act was passed, which action be could interpose no valid defence. The Superintendent, therefore, entered upon the duty imposed upon him, notwithstanding the fact of an ap peal from the decision of the Special Term. The appea has been argued before the General Term of the Su preme Court: bet no decision has yet been pronounced deem it improbable that any other conclusion shall be reached than that already pronounced, and that the worst result will be an expenditure for legal Services of portion of the fund that might have been applied to better purpose but, in any event. I am very clear as to the correctness of my official action. The amount of cash held for account of the several funds is $69,210 BUSINESS OF THE DEPARTMENT It will be seen that the work of the department, ex cept the registration of notes, has greatly exceeded that of most previous years During large portion of the year the labor has been very arduous, taxing the energies of all employed to their fullest extent In view of the demand for promptness in the transac tion of the business of the department, reudering it necossary at all times to have a sufficient force for any emergencies of business, it has been found impossible to reduce the clerical force of the department, and as a con sequence the expenses could not be materially lessened from those of former years. It is, however, anticipated that some reduction of this expense may be practicable during the current year. DESTRUCTION OF BANK NOTE PLATES. Table No is a list of bank note plates destroyed during the year. Quite A large number of plates of closed banks now await destruction, which will receive attention at an early day. CLERKS IN THE DEPARTMENT. The name and fixed compensation of the clerks in the department will be found in table No. The legislative increase of compensation of the clerks in the several departments has been extended to the clerks in this department as an act of justice, or indeed of necessity. Upou none do the inconveniences of deprecisted currency and the burdens of taxation and inflated prices fall so heavily as upon those whose support is de rived from fixed incomes as in the form of salary. Most of the clerks of this department have been em ployed here for many years. some of them from its organization. and cheerfully bear testimony to the ability. courtesy and integrity with which the duties of each have been discharged. ONCLUSION. From the statistics herewith presented it will be seen that Passing Away written upon the banking eye. tem of the State of New York. It is useless to alt in sorrow or to ind lge in vain regrets over the dissolution of system that has so long ministered acceptably to the material prosperity of the State, In the march and progress of social revolution. creating new financial oxigen cies, it has been swept away leaving to UR, however, the hope that the larger growth and higher demands of the opening era may be as fully served and answered as have been those of the one now closing upon our sight. Respectfully submitted GEORGE W. SCHUYLER, Superintendent. Since the above WAS written the General Term has af med the decision of the Court below. Court of Appeals Calendar. 1867 ALBANY.